Marketers
drive into hinterland for growth
From
Cheaper LED TVs To Luxury Cars, Cos Target Demand In Towns, Rural Belt
Chennai: India’s aspiration curve is
taking a detour. After years of cherry-picking focus on metro cities, marketers
are now looking at tier 2 and 3 cities, the so-called ‘hinterland’ demand, to
stay afloat through the downturn. From cars to time-share holidays, durables to
home loans, just about every product and service is suddenly wooing the ‘other
India’ as agri income and insulation from stock market variables makes this
segment less pinched by the slowdown. From the earlier tunnel vision of
Delhi-Mumbai-Bangalore-Chennai, marketers are now looking at cities like Kochi,
Jaipur, Lucknow, Raipur and Pune. Some of these are established markets, others
are just beginning to pick up speed. But Indian marketers now realize, the
demand at the bottom of the geographical pyramid cannot be ignored.
Last week, consumer electronics giant Sony India announced that it will launch small-screen Bravia brand TV sets with prices starting as low as Rs 15,000 to tap demand in smaller towns and cities. Sony isn’t the only durables company to eye non-metro nirvana. Earlier this year, arch rival LG announced a range of less-than-Rs 10,000 LED TV sets while Godrej has a sub-Rs 3000 refrigerator model for tier 2 and 3 cities. Even retail chains like Croma and ezone are looking at more affordable products for these markets.
Car companies, in search of markets less driven by economic sentiment, have been focussing attention on rural/semi urban India for a while now. As a result, rural India is now a ‘strategy market’ for Motown. Says Rakesh Srivastava, head of sales & marketing, Hyundai Motor India, “Hyundai is focusing on rural markets (beyond top 110 cities) by increasing the number of sales outlets. Rural markets are growing on account of growing income and change in lifestyle. In 2011, around 15% of sales came from rural and semi-urban markets. In 2012, it grew to 16.9% and we expect it will increase to over 20% by 2014. Hyundai has 270 rural sales outlets (RSO) and we plan to take it to 350 outlets by end of 2013.”
Forget mass market cars, even luxury brands like Lamborghini are looking at these markets for the next phase of growth. Says Pavan Shetty, head of Indian operations, Lamborghini India: “Even in the super car segment where prices hover above the Rs 3 crore mark, we are seeing growing demand from places like Cochin, Pune, Jaipur and Hyderabad.” Lamborghini is using a hub-and-spoke model to reach out to these customers through their specialized activities. “For instance, an event in Chandigarh attracts customers from Jallandhar and Ludhiana who otherwise would have had to come to Delhi. There are a lot of enquiries from these places,” adds Shetty.
Understandably, the nonmetro share of the market – across product and service categories – isn’t very large, as yet. In durables, the rural market comprises less than 15% of the sales. In cars, the share is around 17-20%. But what marketers are interested in is the aspiration curve which is now headed towards lifestyle choices as well.
Says Rajiv Sawhney, CEO of leading time-share firm Mahindra Holidays & Resorts India: “We are widening our distribution network to tier 2 and 3
ities like Madurai, Pondicherry, Trichy. We would like to increase our presence there alongside places like Surat and Nagpur where the new aspiration, new money, new willingness to spend now exists. So that’s where we are headed.”
Even services like home loans are now firmly focused on the ‘other India’ in their search for growth. Mortgage major, HDFC, for instance, has seen 16% growth in home loan disbursals to Rs 82,452 crore in FY 13 as against Rs 71,113 crore in FY 12. “The demand is largely coming from Tier II and Tier III towns and the periphery of major metros as properties are still quite affordable in these areas,” Renu Sud Karnad, MD, HDFC had said earlier.
DOWN ASPIRATION ROAD
Sony India plans to launch LCD-LED TVs starting as low as Rs 15,000 while LG will launch sub- 10,000 LED TVs
Godrej has a sub- 3,000 refrigerator
Lamborghini has seen demand grow from cities like Kochi, Pune, Jaipur and Hyderabad
HDFC has seen home loan demand grow from tier II & III towns
Last week, consumer electronics giant Sony India announced that it will launch small-screen Bravia brand TV sets with prices starting as low as Rs 15,000 to tap demand in smaller towns and cities. Sony isn’t the only durables company to eye non-metro nirvana. Earlier this year, arch rival LG announced a range of less-than-Rs 10,000 LED TV sets while Godrej has a sub-Rs 3000 refrigerator model for tier 2 and 3 cities. Even retail chains like Croma and ezone are looking at more affordable products for these markets.
Car companies, in search of markets less driven by economic sentiment, have been focussing attention on rural/semi urban India for a while now. As a result, rural India is now a ‘strategy market’ for Motown. Says Rakesh Srivastava, head of sales & marketing, Hyundai Motor India, “Hyundai is focusing on rural markets (beyond top 110 cities) by increasing the number of sales outlets. Rural markets are growing on account of growing income and change in lifestyle. In 2011, around 15% of sales came from rural and semi-urban markets. In 2012, it grew to 16.9% and we expect it will increase to over 20% by 2014. Hyundai has 270 rural sales outlets (RSO) and we plan to take it to 350 outlets by end of 2013.”
Forget mass market cars, even luxury brands like Lamborghini are looking at these markets for the next phase of growth. Says Pavan Shetty, head of Indian operations, Lamborghini India: “Even in the super car segment where prices hover above the Rs 3 crore mark, we are seeing growing demand from places like Cochin, Pune, Jaipur and Hyderabad.” Lamborghini is using a hub-and-spoke model to reach out to these customers through their specialized activities. “For instance, an event in Chandigarh attracts customers from Jallandhar and Ludhiana who otherwise would have had to come to Delhi. There are a lot of enquiries from these places,” adds Shetty.
Understandably, the nonmetro share of the market – across product and service categories – isn’t very large, as yet. In durables, the rural market comprises less than 15% of the sales. In cars, the share is around 17-20%. But what marketers are interested in is the aspiration curve which is now headed towards lifestyle choices as well.
Says Rajiv Sawhney, CEO of leading time-share firm Mahindra Holidays & Resorts India: “We are widening our distribution network to tier 2 and 3
ities like Madurai, Pondicherry, Trichy. We would like to increase our presence there alongside places like Surat and Nagpur where the new aspiration, new money, new willingness to spend now exists. So that’s where we are headed.”
Even services like home loans are now firmly focused on the ‘other India’ in their search for growth. Mortgage major, HDFC, for instance, has seen 16% growth in home loan disbursals to Rs 82,452 crore in FY 13 as against Rs 71,113 crore in FY 12. “The demand is largely coming from Tier II and Tier III towns and the periphery of major metros as properties are still quite affordable in these areas,” Renu Sud Karnad, MD, HDFC had said earlier.
DOWN ASPIRATION ROAD
Sony India plans to launch LCD-LED TVs starting as low as Rs 15,000 while LG will launch sub- 10,000 LED TVs
Godrej has a sub- 3,000 refrigerator
Lamborghini has seen demand grow from cities like Kochi, Pune, Jaipur and Hyderabad
HDFC has seen home loan demand grow from tier II & III towns
Nandini
Sen Gupta TNN TOI130624
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